Hmm. Looking at it now, isn't it suspicious that it says "Features: None." for the input parameter in the fields list?
I don't know why it would say that. The input parameter in the model I published has the data type "Feature Class".
This is what I get back from the service's StatusUpdated event (running with 'informative' messaging):
Submitted.
Executing...
Executing (Buf3): Buf3 "Feature Set" "Record Set" "Record Set" "Record Set" c:\arcgisserver\directories\arcgisjobs\buf3_gpserver\jef2879d669e649a6b6be2b1e65e5f2e3\scratch\scratch.gdb\locations_Buffer1
Start Time: Wed May 08 17:06:52 2013
Executing (Buf3): Buf3 "Feature Set" "Record Set" "Record Set" "Record Set" c:\arcgisserver\directories\arcgisjobs\buf3_gpserver\jef2879d669e649a6b6be2b1e65e5f2e3\scratch\scratch.gdb\locations_Buffer1
Start Time: Wed May 08 17:06:52 2013
Executing (Get Count): GetCount "Feature Set"
Start Time: Wed May 08 17:06:52 2013
Row Count = 0
Succeeded at Wed May 08 17:06:52 2013 (Elapsed Time: 0,00 seconds)
Executing (Buffer): Buffer "Feature Set" c:\arcgisserver\directories\arcgisjobs\buf3_gpserver\jef2879d669e649a6b6be2b1e65e5f2e3\scratch\scratch.gdb\locations_Buffer1 "400 Meters" FULL ROUND NONE #
Start Time: Wed May 08 17:06:52 2013
The process did not execute because the precondition is false.
Succeeded at Wed May 08 17:06:52 2013 (Elapsed Time: 0,00 seconds)
Succeeded at Wed May 08 17:06:52 2013 (Elapsed Time: 0,27 seconds)
Succeeded at Wed May 08 17:06:52 2013 (Elapsed Time: 0,27 seconds)
Invalid return value: c:\arcgisserver\directories\arcgisjobs\buf3_gpserver\jef2879d669e649a6b6be2b1e65e5f2e3\scratch\scratch.gdb\locations_Buffer1
Failed.
The preconditions is just to have GetCount execute first. Returning 0 causes the "false" value and skipping buffer entirely.